Huse quoted by Law360 on 7 Traits of Most Profitable Firms

Check out the article below by Law 360's Carmen Germaine as she discusses the 7 Traits Of The Most Profitable Law Firms with added quotes from Jill Huse.

Law360, New York (March 18, 2016, 4:39 PM ET) -- Most firms dream of raking in millions in profits-per-partner, but it doesn’t take long to discover that winning big profits isn’t as easy as collecting big revenue.

In fact, experts say that firms in the upper echelon have several key characteristics that help them succeed in an increasingly competitive marketplace, which their profit-hungry counterparts could do well to emulate.

Here, Law360 looks at the characteristics that put firms at the top of the profit-making heap.

They’re Discerning

Every business knows that keeping margins up requires a steady stream of income, but experts say highly profitable firms understand that sometimes the best way to maintain that income is to limit their time on the small fry and focus on the biggest fish in the sea.

They’re Focused

While firms can be tempted to expand aggressively into a variety of markets in an effort to capture new revenue, experts say that the most profitable firms pare down their practices to only a handful where they can attract the biggest clients and the highest rates.

They’re Organized

As impressive as some firms’ financials are, even the firms at the very top don’t bring in as much revenue as the corporations on the bottom of the Fortune 500. But experts say that the most profitable firms are slowly closing the gap by taking a few pointers from their corporate client base.

“The more profitable firms are usually run more like a business,” Jill Huse of Society 54 said.

Huse explained that some firms have a managing partner making decisions for the firm who’s not “billing out 2,000 hours a year” or practicing law, focusing exclusively on organization and helping the firm expand business.

“I think that’s one of the most successful models I’ve seen,” Huse said.

Although firms are required to have an attorney running the firm itself, Huse said she’s also seen success with firms that hire executive-level administrative support from the corporate world, snagging help from former chief operating officers, marketing officers and executive directors.

Huse said C-suite hires can help firms streamline operations while expanding business, offering novel strategies in areas like billing structures or project management.

“It’s important to have a managing partner that doesn’t practice … but also to have that administrative support that’s thinking outside the box and able to bring new ideas, new resources to the law firm and really elevate the practice,” Huse said.

They’re Meticulous

All firms pay attention to how much business their partners are bringing in, and many compensate their attorneys accordingly. But experts say that what sets the most successful firms apart is that they consider a wider range of metrics and focus more on actual profits than the average bear.

Huse said that successful firms bring a business sensibility to analyzing their metrics, sometimes employing CFOs with business backgrounds who can help the firm understand their financial figures from a big-picture standpoint to see if the firm is operating effectively.

They’re Lean

As part of their focus on their margins, experts said, highly profitable firms also make an effort to keep their organizations trim and their costs low.

Successful firms also keep their costs down by strategically using associates and even contract attorneys to provide good work at less cost to the firm, Huse said.

Contract attorneys in particular are increasingly popular with profitable firms, Huse said, because they can provide high-quality work at high billable rates but cost less to the firm.

“Firms are making a killing on those types of people right now,” Huse said.

They’re Cozy

As partners are increasingly called upon to cross-sell their firm’s practices to existing clients, experts say that integrating lateral hires is essential to ensuring continuing revenue.

They’re Attentive

Firms need loyal clients to reap big profits, and experts say that the most profitable firms go above and beyond to engage clients and seek out their feedback.

“They’re thinking about institutionalizing those clients, making a client long-standing,” Huse said.